Tracing energy shocks through the Irish supply chain: A new monitoring framework

This Staff Insight presents a new framework for monitoring price pressures along the supply chain, helping to identify in advance which consumer categories are likely to experience price movements and the mechanisms driving them, with a particular focus on imported energy shocks. The 2026 energy shock (the oil-price spike that followed the US-Iran conflict and the threat to the Strait of Hormuz) is clearly visible in the data, but broader supply-chain pass-through remains limited so far against a backdrop of persistent domestic non-energy inflation. Applied to the adverse and severe oil and gas price scenarios included in the Q2 2026 Quarterly Bulletin, the framework implies increases of approximately 1.7 and 5.0 per cent in the HICP price level under full cost pass-through. These are static estimates, rather than forecasts, relating solely to the increase in energy costs. Roughly one quarter of the estimated increase in price level comes indirectly via the supply chain of non-energy goods and services.